LNL taps Ares net-lease founder for structured capital build

LNL Capital has named Joel Tomlinson managing partner to build a structured debt and equity strategy across single-tenant retail, industrial and healthcare net lease, IREI reported. That title points at capital formation rather than acquisitions: originating and assembling net-lease paper is a different business from bidding on the buildings, and it earns a spread instead of a cap rate.

What LNL is actually buying is a transaction record. Tomlinson brings more than 25 years in the sector and has completed more than $15 billion of direct net-lease transactions spanning public and non-traded REITs and alternative asset managers. He joins from Ares Management, where he was a managing director and a founding member of the firm's net lease strategy, and previously held executive positions at Apollo Global Management, Realty Income and Cole Capital.

Net lease spent this year raising capital through structures that leave the operating platform in place. KKR's €528 million purchase of 49 percent of Realty Income's European net-lease portfolio left the REIT with 51 percent and the management contract, and it priced 17 years of European net-lease income at 5.9 percent. That is the template that lets a US net-lease owner take private capital without repricing its equity.

That template needs people who can operate it, and the firms on the other side of it keep growing. Ares, where Tomlinson helped build the net lease effort, reported $458.8 billion of regulatory assets under management as of September 12. It has also been one of the larger recipients of pension real estate money: both of CalPERS's first-quarter real estate commitments went to the firm, with the plan's real estate at roughly 8.8 percent of $627.7 billion against a 10 percent target.

The refinancing wall is a duration transfer from banks to private credit, and net lease is among the cleanest places to take it. Long leases to corporate tenants are paper a private vehicle can hold past a maturity a bank cannot, which means the durable position in the sector is not owning the rent but pricing the paper written against it. That is the seat LNL just filled.

The coverage does not say whether LNL will raise third-party capital or run the strategy on its own balance sheet, and no fund size has been reported. Third-party money would make LNL a rival for the same net-lease assets the REITs are already recapitalizing; a balance-sheet effort makes it a lender to them. The first vehicle will show which one it turns out to be, and it will tell allocators whether this hire was about buying net-lease income or financing the firms that do.